The 411 on Hiring a Licensed Contractor

In short, a contractor’s license protects you -- the homeowner.  Phew, right?!


Hiring a licensed contractor is a sound decision for all parties involved in a home renovation or remodel.  As summer is around the corner, we thought it would be a great time to share key information with you before you hire a licensed contractor.  


I tell everyone to always check a contractor’s license. Many contractors have a license number, but some licenses have expired or been put on hold due to complaints or legal action against the license.  Some contractors use other people’s licenses illegally, so be sure to do your homework before handing over a deposit. 


I am a general contractor that specializes in Finish Carpentry and Cabinets. Any job over $500.00 (including materials) needs to be done by a licensed contractor. Every contractor has to have a license for the trade they are doing:  a C-6 is for millwork (cabinets and millwork), electrical would be a C-10, the general contractor would be a B license, etc.


Contractors are not licensed to protect themselves. A license is only to protect the customer. In order to get a contractor’s license, we must purchase a $12,500.00 bond. This is to protect your money. If a contractor takes a deposit or money from a customer and does not do the work or complete the job, the customer can contact the bond company to get their money back. Then the bond company goes after the contractor, plus it is reported to the CSLB (Contractors State License Board) and the license will be put on hold until the matter is rectified.


If you are doing a small job (under $500.00), you can use an unlicensed person. This is why most handymen are unlicensed, even though most break the law based on the $500.00 limit.


When hiring a contractor of any kind, the customer should go to The contractor's license will show if the license is valid, the bond company, and if they have workers’ comp insurance.


An item not required by CSLB, but which is VERY IMPORTANT, is that a contractor carry liability insurance. This is in place to cover any damage that would occur during or after a job is done on your house. Say a cabinet guy installed a cabinet and put a screw through a water pipe, it would seal the pipe. As the screw started to rust over the next couple of months, it would then start to leak. We carry 2 million dollars in liability insurance, which covers your house as for any work we do, for long as you live there.  So, if that were to happen and your house floods, you are covered by our liability insurance.


Workers’ Comp -- We carry this VERY expensive insurance to cover our employees and protect the homeowner. If an employee is injured at your house, and the contractor does not carry Workers Comp (which is required by law), the employee could go after your home insurance. (Just like if a burglar broke into your house, tripped and broke his leg, he can sue you.)


So before you hire a "Boutique Carpenter,” please do your due diligence and check their qualifications on -- it can save you thousands!

Leave a comment